The Chartered Institute of Housing (CIH) has called for a one-off debt settlement for local councils when the current Housing Revenue Account is dismantled, in its interim response to the government's consultation on the reform of council housing finance.

CIH has warned against saddling local authorities with more debt than is currently in the system, however, as this will reduce the scope to meet tenants' needs and to maintain housing stock without further reliance on borrowing or future grant allocations, which no government could guarantee. Concerns have also been raised about risks that a significant uplift in funding for future major repairs at the full level identified by the Building Research Establishment (BRE) may not be forthcoming.

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CIH Chief Executive Sarah Webb said: "We support the move towards self-financing and the long-term reallocation of debt as the only sustainable method for future council housing finance and we urge the government to move as swiftly as possible to make this a reality. However, for self-financing to deliver long-term sustainable investment, there must be an acceptance that authorities can borrow in accordance with prudential rules."

(CD/KMcA)